According to the research, German open and closed-ended funds currently have approximately €10.8 billion ($9.2 billion) to invest in European real estate. 'Given the existing average asset allocations, this translates into a potential €400 million ($340 million) for investment into the hotel sector' said Arthur de Haast, managing director Europe at Jones Lang LaSalle Hotels. 'German funds are experiencing high cash in-flows as a result of the poor stock performance, and this has only increased since the events of 11 September, with investors viewing property as a safe investment haven in the current economic climate'.

Historically the German funds have been primarily focused on domestic hotel investment activity. However this pattern is beginning to change and more recently the funds have branched out and concluded an increasing number of acquisitions outside of their home domicile. Deutsche Grundbesitz-Investmentgesllschaft (DGI) was the first open-ended fund to set up an international capacity, the €1.1 billion ($935 million) 'Grundbesitz Invest Global' to invest in the USA and Asia. Commerz Grundbesitz Investmentgesellschaft has also announced plans for an international real estate fund in 2002 with a focus on the USA.

De Haast continued: 'More specifically in the hotel sector, Deutsche Immobiliend Fonds (DIFA) bought the Radisson SAS in Brussels earlier this year. This follows on from DGI's sale and leaseback deal with Accor on four hotels in Spain. We have recently seen CGI acquire a hotel development at Charles de Gaulle airport in Paris, to be operated by Marriott Hotels & Resorts under the Courtyard brand.'